World Trade

Organization

UNITED STATES  SECTIONS 301-310 OF THE TRADE
ACT OF 1974

Report of the Panel

(Continued)

C. The EC claim that section 304 is inconsistent with Article 23.2(a) of
the DSU

1. Claims and Arguments of the Parties

7.29 The EC claims that Section 304 mandates
the USTR to make a "unilateral" determination on whether another
WTO Member has violated US rights under the WTO.
The EC submits that this determination by the USTR has to be made
within 18 months after the initiation of an investigation under Section 302,
a date that normally coincides with the request for consultations under the
DSU. According to the EC, DSU
procedures can, however, be assumed to take 19 ½ months.
The EC submits that, as a result of the 18 months deadline, the
determination under Section 304 is required even if the DSB has not yet
adopted a report with findings on the matter, contrary to Article 23.2(a)
of the DSU.

7.30
The US responds that nothing in Section 304 compels the
USTR to make a specific determination that US rights have been denied in the
absence of panel or Appellate Body findings, adopted by the DSB.
In its second submission, the US goes even further and submits that
since Section 304 determinations have to be made on the basis of WTO dispute
settlement proceedings pursuant to Section 304 (a)(1), a determination that
US rights have been denied before the adoption of DSB findings is precluded.
According to the US, Section 304 only requires the USTR to
"determine whether" 
not to determine that  US
rights have been denied. In the
US view, the USTR has the discretion to determine that no violation has
occurred, that no violation has been confirmed by the DSB, that a violation
will be confirmed on the date the DSB adopts panel or Appellate Body
findings or that the ongoing investigation must terminate.
The US also argues that the relevant period for DSU procedures to be
completed  from the request for consultations to the adoption of reports
by the DSB  is not 19 ½ months, as claimed by the EC, but 16 months and
20 days.

2. Preliminary Panel Findings in respect of the Statutory Language of
Section 304

7.31 As regards the statutory language of Section
304, we consider it sufficient to make the following findings based upon
examination of the text itself, the evidence and arguments submitted to us
in this respect as well as interpretation, where applicable, of the relevant
provisions of the WTO.

First, as a matter of fact, we find that under the statutory
language of Section 304 (a)(2), the USTR is mandated, i.e. obligated in
law, to make a determination on whether US rights are being denied within
18 months after the request for consultations.643 This is a mandatory feature of Section 304 in which the
Legislature left no discretion to the Executive Branch.644

Second, as a matter of law, since most of the time-limits in the
DSU are either minimum time-limits without ceilings645 or
maximum time-limits that are, nonetheless, indicative only,646 DSU
proceedings  from the request for consultations to the adoption of
findings by the DSB647  may take longer than 18 months and have in
practice often led to time-frames beyond 18 months.648 As a result, the USTR could be obligated in certain cases brought
by the US  and indeed in certain cases has already been so obligated
 to make a unilateral determination as to whether US rights are being
denied before the completion of multilateral DSU proceedings.

Third, as a matter of fact, we find that even though the USTR is
obligated to make a determination within the 18 months time-frame, under
the broad discretion allowed under Section 304 there are no circumstances
which would compel him or her to make a determination to the effect that
US rights under the WTO Agreement have been denied  hereafter referred
to as a "determination of inconsistency"  before the
exhaustion of DSU proceedings.

Section
304 (a) requires the USTR to determine whether US rights are being denied within 18 months.It does not require the USTR to determine that
US rights are being denied at the 18 months deadline.The criteria referred to in Section 304 (a) on which the USTR
has to base its determination  "the investigation initiated under
section 302 and the consultations (and the proceedings, if applicable)
under section 303"  allow the USTR to exercise wide discretion in
all cases concerning the actual content of the determination he or she has
to make.

As will be seen below, however, this discretion does not necessarily
absolve Section 304 from a breach of the DSU.

Fourth, as a matter of fact, we find that even though the USTR is
not obligated, under any
circumstance, to make a Section 304 determination of inconsistency prior
to exhaustion of DSU proceedings, it is not precluded by the statutory language of Section 304 itself from
making such a determination.649 We
find that the broad discretion given to the USTR allows him or her to do
exactly what the statutory language suggests: to determine whether
US rights have been denied, i.e. to determine that they have not
been denied but also to determine that they have
been denied.650

7.32
In conclusion, the statutory language of Section 304 mandates
the USTR in certain cases to make a unilateral determination on whether US
rights have been denied even before
the adoption by the DSB of its findings on the matter.However, the statutory language of Section 304 neither mandates
the USTR to make a determination of inconsistency nor precludes
him or her from making such a determination.

7.33
Critically, the statutory language of Section 304 reserves to the USTR when
exercising his or her mandatory duty after 18 months, the right to make a
unilateral determination of inconsistency even prior to exhaustion of DSU
proceedings.

3. The Statutory Language of Section 304 and Member Obligations under
Article 23 of the DSU

7.34 The statutory language of Section 304
reserves, then, to the USTR when exercising his or her mandatory duty
after 18 months, the right to make a unilateral determination of
inconsistency even prior to exhaustion of DSU proceedings. As noted, it
does not impose on the USTR the duty to make such a determination. What is
at issue, then, is whether  given, on the one hand, the duty in some
cases to make a unilateral determination prior to exhaustion of
multilateral proceedings and, on the other hand, the full discretion as to
the content of that determination  Section 304 violates, in and of
itself rather than with reference to any particular instance of its
application, the obligations assumed by Members under Article 23.2(a) of
the DSU. We must, thus, turn to the interpretation of Article 23 of the
DSU.

(a) The dual nature of obligations under Article 23 of the DSU

7.35 Article 23 of the DSU deals, as its title
indicates, with the "Strengthening of the Multilateral System".
Its overall design is to prevent WTO Members from unilaterally resolving
their disputes in respect of WTO rights and obligations. It does so by
obligating Members to follow the multilateral rules and procedures of the
DSU.

7.36 Article 23.1 provides as follows:

"Strengthening of the Multilateral System

When Members seek the redress of a violation of obligations or other
nullification or impairment of benefits under the covered agreements or
an impediment to the attainment of any objective of the covered
agreements, they shall have recourse to, and abide by, the rules
and procedures of this Understanding" (emphasis added).

7.37 Article 23.2 specifies three elements that
need to be respected as part of the multilateral DSU dispute settlement
process. It provides as follows:

"In such cases [referred to in Article 23.1, i.e. when Members
seek the redress of WTO inconsistencies], Members shall:

not make a determination to the effect that a violation has
occurred, that benefits have been nullified or impaired or that the
attainment of any objective of the covered agreements has been
impeded, except through recourse to dispute settlement in accordance
with the rules and procedures of this Understanding, and shall make
any such determination consistent with the findings contained in the
panel or Appellate Body report adopted by the DSB or an arbitration
award rendered under this Understanding;

follow the procedures set forth in Article 21 to determine the
reasonable period of time for the Member concerned to implement the
recommendations and rulings;and

follow
the procedures set forth in Article 22 to determine the level of
suspension of concessions or other obligations and obtain DSB
authorization in accordance with those procedures before suspending
concessions or other obligations under the covered agreements in
response to the failure of the Member concerned to implement the
recommendations and rulings within that reasonable period of
time".

7.38
On this basis, we conclude as follows:

It is for the WTO through the DSU process  not for an
individual WTO Member  to determine that a WTO inconsistency has
occurred (Article 23.2(a)).

It is for the WTO or both of the disputing parties, through the
procedures set forth in Article 21  not for an individual WTO Member
 to determine the reasonable period of time for the Member concerned
to implement DSB recommendations and rulings (Article 23.2(b)).

It is for the WTO through the procedures set forth in Article 22
 not for an individual WTO Member  to determine, in the event of
disagreement, the level of suspension of concessions or other
obligations that can be imposed as a result of a WTO inconsistency, as
well as to grant authorization for the actual implementation of these
suspensions.

7.39 Article 23.2 clearly, thus, prohibits
specific instances of unilateral conduct by WTO Members when they seek
redress for WTO inconsistencies in any given dispute. This is, in our
view, the first type of obligations covered under Article 23.

7.40 It is not, however, our task in these
proceedings to assess the WTO conformity of specific determinations made
under Section 304 in a given dispute but to determine, instead, whether
Section 304 as such violates Article 23 of the DSU. This leads us to the
second type of obligations covered under Article 23.

7.41 As a general proposition, GATT acquis,
confirmed in Article XVI:4 of the WTO Agreement and recent WTO panel
reports, make abundantly clear that legislation as such, independently
from its application in specific cases, may breach GATT/WTO obligations:

In GATT jurisprudence, to give one example, legislation
providing for tax discrimination against imported products was found
to be GATT inconsistent even before it had actually been applied to
specific products and thus before any given product had actually been
discriminated against.651

Article XVI:4 of the WTO Agreement explicitly confirms that
legislation as such falls within the scope of possible WTO violations.
It provides as follows:

"Each Member shall ensure the conformity of its laws,
regulations and administrative procedures with its obligations
as provided in the annexed Agreements" (emphasis added).

The three types of measures explicitly made subject to the
obligations imposed in the WTO agreements  "laws, regulations
and administrative procedures"  are measures that are
applicable generally; not measures taken necessarily in a specific
case or dispute. Article XVI:4, though not expanding the material
obligations under WTO agreements, expands the type of measures made
subject to these obligations.652

Recent WTO panel reports confirm, too, that legislation as
such, independently from its application in a specific case, can be
inconsistent with WTO rules.653

7.42 Legislation may thus breach WTO
obligations. This must be true, too, in respect of Article 23 of the
DSU. This is so, in our view, not only because of the above-mentioned
case law and Article XVI:4, but also because of the very nature of
obligations under Article 23.

7.43 Article 23.1 is not concerned only with
specific instances of violation. It prescribes a general duty of a dual
nature. First, it imposes on all Members to "have recourse to"
the multilateral process set out in the DSU when they seek the redress
of a WTO inconsistency. In these circumstances, Members have to have
recourse to the DSU dispute settlement system to the exclusion of any
other system, in particular a system of unilateral enforcement of WTO
rights and obligations. This, what one could call "exclusive
dispute resolution clause", is an important new element of Members'
rights and obligations under the DSU. Second, Article 23.1 also
prescribes that Members, when they have recourse to the dispute
settlement system in the DSU, have to "abide by" the rules and
procedures set out in the DSU. This second obligation under Article 23.1
is of a confirmatory nature: when having recourse to the DSU Members
must abide by all DSU rules and procedures.

7.44 Turning to the second paragraph under
Article 23, Article 23.2  which, on its face, addresses conduct in
specific disputes  starts with the words "[i]n such cases".
It is, thus, explicitly linked to, and has to be read together with and
subject to, Article 23.1.

7.45 Indeed, two of the three prohibitions
mentioned in Article 23.2  Article 23.2(b) and (c)  are but
egregious examples of conduct that contradicts the rules and procedures
of the DSU which, under the obligation in Article 23.1 to "abide by
the rules and procedures" of the DSU, Members are obligated to
follow.654 These rules and procedures clearly cover much more than
the ones specifically mentioned in Article 23.2.655 There is a great
deal more State conduct which can violate the general obligation in
Article 23.1 to have recourse to, and abide by, the rules and procedures
of the DSU than the instances especially singled out in Article 23.2.656

7.46 Article 23 interdicts, thus, more than
action in specific disputes, it also provides discipline for the general
process WTO Members must follow when seeking redress of WTO
inconsistencies. A violation of the explicit provisions of Article 23
can, therefore, be of two different kinds. It can be caused

by an ad hoc, specific action in a given dispute, or

by measures of general applicability, e.g. legislation or
regulations, providing for a certain process to be followed which does
not, say, include recourse to the DSU dispute settlement system or
abide by the rules and procedures of the DSU.

(b) Legislation which violates Article 23 of the DSU

7.47 What kind of legislation would constitute
a violation of Article 23?

7.48 Surely, to give an extreme example,
legislation mandating the making of a determination of inconsistency as
soon as a WTO panel has issued its report  without awaiting the
result of a possible appeal and the adoption of DSB recommendations 
would violate Article 23.2(a).

7.49 How, then, should we evaluate Section 304
the statutory language of which mandates in some cases the making of a
determination prior to exhaustion of DSU proceedings and which reserves
to the USTR the right when exercising this mandatory duty to make a
unilateral determination of inconsistency?

7.50 We first find that if the USTR were to
exercise, in a specific dispute, the right thus reserved for him
or her in the statutory language of Section 304 and make a determination
of inconsistency, the US conduct would meet the different elements
required for an individual breach under Article 23.2(a).657 However,
Section 304 does not mandate the USTR to make a determination of
inconsistency in violation of Article 23 in each and every specific
dispute; it merely sets out in the statutory language itself that the
USTR has the power and right to do so. The question here is whether this
constitutes a breach of the second type of obligations under Article 23,
namely a breach by measures of general applicability such as a general
law.

7.51 The parties focused much of their
arguments on the kind of legislation which could be found to be
inconsistent with WTO obligations. The US submitted forcefully that only
legislation mandating a WTO inconsistency or precluding
WTO consistency, can, as such, violate WTO provisions. This was at the
very heart of the US defence. On this US reading it followed that since
Section 304 never mandates a specific determination of inconsistency
prior to exhaustion of DSU proceeding nor, in the US view, precludes the
US from acting consistently with its WTO obligations in all
circumstances, the legislation, in and of itself could not be in
violation of Article 23.2(a) of the DSU.

7.52 The EC submitted with equal force that
also certain types of legislation under which a WTO inconsistent conduct
is not mandated but is allowed, could violate WTO
obligations. The EC considered that Section 304 is of such a nature.

7.53 Despite the centrality of this issue in
the submissions of both parties, we believe that resolving the dispute
as to which type of legislation, in abstract, is capable of
violating WTO obligations is not germane to the resolution of the type
of claims before us. In our view the appropriate method in cases such as
this is to examine with care the nature of the WTO obligation at issue
and to evaluate the Measure in question in the light of such
examination. The question is then whether, on the correct interpretation
of the specific WTO obligation at issue, only mandatory or also
discretionary national laws are prohibited. We do not accept the legal
logic that there has to be one fast and hard rule covering all domestic
legislation. After all, is it so implausible that the framers of the WTO
Agreement, in their wisdom, would have crafted some obligations which
would render illegal even discretionary legislation and crafted other
obligations prohibiting only mandatory legislation?658 Whether or not
Section 304 violates Article 23 depends, thus, first and foremost
on the precise obligations contained in Article 23.

7.54 We can express this view in a different
way:

Even if we were to operate on the legal assumption that, as
argued by the US, only legislation mandating a WTO
inconsistency or precluding WTO consistency, can violate WTO
provisions; and

confirm our earlier factual finding in paragraph 7.31(c) that
the USTR enjoys full discretion to decide on the content of the
determination,

we would still disagree with the US that the combination of (a) and
(b) necessarily renders Section 304 compatible with Article 23,
since Article 23 may prohibit legislation with certain discretionary
elements and therefore the very fact of having in the legislation such
discretion could, in effect, preclude WTO consistency. In other words,
rejecting, as we have, the presumption implicit in the US argument
that no WTO provision ever prohibits discretionary legislation does
not imply a reversal of the classical test in the pre-existing
jurisprudence that only legislation mandating a WTO inconsistency or
precluding WTO consistency, could, as such, violate WTO provisions.659 Indeed that is the very test we shall apply in our analysis. It
simply does not follow from this test, as sometimes has been argued,
that legislation with discretion could never violate the WTO. If, for
example, it is found that the specific obligations in Article 23
prohibit a certain type of legislative discretion, the existence of
such discretion in the statutory language of Section 304 would
presumptively preclude WTO consistency.

7.55
What, then, does such an examination of Article 23 yield?

7.56 We have already found that under the
statutory provisions of Section 304 each time the USTR exercises the
mandatory duty to make a determination, the statutory language gives him
or her discretion and reserves to him or her the right to make a
determination of inconsistency even in cases where DSU proceedings have
not been exhausted.

7.57 In our view, the ordinary meaning of the
provisions of Article 23, even when read in abstract, supports the
position that this aspect of Section 304 constitutes a prima facie
violation of DSU rules and procedures. This interpretation of Article 23
is amply confirmed when we consider, as is our duty under the Vienna
Convention, the good faith provision in the general rule of
interpretation in Article 31 of that Convention, and when we evaluate
the terms of Article 23 not in abstract, but in their context and in the
light of the DSU's and the WTO's object and purpose.

TO CONTINUE WITH UNITED STATES  SECTIONS 301-310 OF THE TRADE
ACT OF 1974

643 For purposes of this
dispute, we assume that the 18 months time-limit is the earlier of the two
time-limits mentioned in Section 304, i.e. falls before the lapse of
"30 days after the date on which the dispute settlement procedure is
concluded".

644 The US agrees that
it cannot postpone the making of this determination.In respect of Japan 
Measures Affecting Agricultural Products ("Japan
 Agricultural Products"), adopted 19 March 1999, WT/DS76/AB/Rand India  Patents (US),
for example, the US  answering Panel Question 24 a) (as reflected in
para. 4.586
of this Report)  stated that "the United States did not make
formal Section 304 determinations by the 18-month anniversary, but
should have" (emphasis added).

645 Article 4.7 of the
DSU, for example, provides for a minimum period of 60 days for
consultations, unless there is agreement to the contrary or urgency in
accordance with Article 4.8.

646 Article 12.8 refers
to six months "as a general rule" for the timeframe between panel
composition and issuance of the final report to the parties.Article 12.9 provides that "[i]n no case should
the period from the establishment of the panel to the circulation of the
report to the Members exceed nine months" (emphasis added).Article 17.5 states that "[a]s a general rule, the
proceedings [of the Appellate Body] shall not exceed 60 days".It adds, however, that "[i]n no case shall the proceedings
exceed 90 days".However,
even this seemingly compulsory deadline has been passed in three cases so
far (United States 
Restrictions on Imports of Cotton and Man-Made Fibre Underwear,
WT/DS24/AB/R, 91 days; European
Communities  Measures Concerning Meat and Meat Products (Hormones) ("EC  Hormones"), WT/DS26/AB/R and DS48/AB/R, 114 days; and US
 Shrimp, op. cit., 91 days). Finally, Article 20 refers to 9 months
 12 months in case of an appeal  "as a general rule" for the
period between panel establishment and adoption of report(s) by the DSB.

647 When we refer
hereafter to the exhaustion of DSU proceedings, we mean the date of adoption
by the DSB of panel and, as the case may be, Appellate Body reports on the
matter.

649
The US argued in its second submission that the USTR is precluded from making such a
determination of inconsistency.To the
extent this US argument is based on the statutory language of Section 304 alone, we reject
the argument for the reasons given in this Report.

650
Section 304 (a) refers to WTO "proceedings, if applicable" as a basis of the
determination to be made.This statutory
language is not sufficiently precise to construe it as curtailing the USTR's discretion to
make a determination of inconsistency before the adoption of findings by the
DSB.The reference to "proceedings" as a
basis for the determination allows WTO proceedings to be taken into account but does not,
in our view, preclude a determination of inconsistency before the final outcome of WTO
proceedings, i.e. before the adoption of DSB recommendations.We note that whereas the first time-limit under
Section 304 (a)(2) explicitly refers to the conclusion of dispute settlement
procedures ("30 days after the date on which the dispute settlement procedure is
concluded"), the second time-limit does not refer to any proceedings, let alone to
the completion of WTO proceedings ("18 months after the date on which the
investigation is initiated").Section 304 (a)(2)
mandates the making of a determination "the earlier of" these two time-limits.We note, finally, that the US itself had first
argued that Section 304 does not "compel" the making of a determination of
inconsistency which seems to imply that although not compelled, the USTR is permitted to
make such a determination.Only in its second
submission did the US argue that the USTR is actually "precluded" from making
such determination.

651
See, for example, Panel Reports on United States
 Taxes on Petroleum and Certain Imported Substances ("US  Superfund"), adopted 17 June 1987,
BISD 34S/136, para. 5.2.2 (where the legislation imposing the tax discrimination only
had to be applied by the tax authorities at the end of the year after the panel examined
the matter) and United States  Measures
Affecting Alcoholic and Malt Beverages ("US
 Malt Beverages"), adopted 19 June 1992, BISD 39S/206, paras. 5.39,
5.57, 5.60 and 5.66 (where the legislation imposing the discrimination was, for example,
not being enforced by the authorities).See
also Panel Reports on EEC  Regulation on
Imports of Parts and Components ("EEC
 Parts and Components"), adopted 16 May 1990, BISD 37S/132, paras.
5.25-5.26, Thailand  Restrictions on
Importation of and Internal Taxes on Cigarettes ("Thai Cigarettes"),
adopted 7 November 1990, BISD 37S/200, para. 84 and United States  Measures Affecting the
Importation, Internal Sale and Use of Tobacco ("US  Tobacco"), adopted 4 October 1994,
BISD 41S/131, para. 118.

652
Article XVI:4 goes a step further than Article 27 of the Vienna Convention.Article 27 of the Vienna Convention provides that
"[a] party may not invoke the provisions of its internal law as justification for its
failure to perform a treaty".Article
XVI:4, in contrast, not only precludes pleading conflicting internal law as a
justification for WTO inconsistencies, but requires WTO Members actually to ensure the
conformity of internal law with its WTO obligations.

654
Article 23.2(a), in contrast, prohibiting Members from making certain determinations, is
not covered elsewhere in the DSU.

655
One could refer, for example, to the requirement to request consultations pursuant to
Article 4 of the DSU before requesting a panel under Article 6.

656
Not notifying mutually agreed solutions to the DSB as required in Article 3.6 of the DSU
or not abiding by the requirements for a request for consultations or a panel as
elaborated in Articles 4 and 6 are some other examples of conduct that would be contrary
to DSU rules and procedures but is not mentioned specifically in Article 23.2.

657
We consider that if the USTR were to exercise, in a specific dispute, the right reserved
to him or her under the statutory language of Section 304 to make a determination of
inconsistency before exhaustion of DSU procedures, the US conduct would meet the different
elements required for a breach of Article 23.2(a) in a specific instance.This conclusion is of crucial importance since it
shows that the statutory language of Section 304 reserves the right to the USTR to breach
at least the first type of obligations in Article 23.2(a) in a specific instance.Four elements must be satisfied for a specific act
in a particular dispute to breach Article 23.2(a):

the act is taken "in such cases" (chapeau
of Article 23.2), i.e. in a situation where a Member "seek[s] the redress of a violation of obligations or other
nullification or impairment of benefits under the covered agreements or an impediment to
the attainment of any objective of the covered agreements", as referred to in Article
23.1;

the
act constitutes a "determination";

the
"determination" is one "to the effect that a violation has occurred, that
benefits have been nullified or impaired or that the attainment of any objective of the
covered agreements has been impeded";

the
"determination" is either not made
"through recourse to dispute settlement in accordance with the rules and procedures
of [the DSU]" or not made "consistent
with the findings contained in the panel or Appellate Body report adopted by the DSB or an
arbitration award rendered under [the DSU]".The
two elements of this requirement are cumulative in nature.Determinations are only allowed when made through recourse to the DSU and consistent with findings adopted by the DSB or
an arbitration award under the DSU.

Given that Article 23.2(a) only deals with
"determinations" in case a Member is seeking redress of WTO inconsistencies, we
are of the view that a "determination" can only occur subsequent to a Member having decided that, in its
preliminary view, there may be a WTO inconsistency, i.e. only once that Member has decided
to seek redress of such inconsistency.Mere
opinions or views expressed before that stage is reached, are not intended to be covered
by Article 23.2(a).However, once a Member
does bring a case under the DSU, in particular once it requests the establishment of a
panel, one can assume that this preliminary stage has been passed and the threshold of a
"determination" met.Such reading
of the term "determination" is confirmed by the exception provided for
"determinations" made "through recourse to dispute settlement in accordance
with" the DSU, an exception that explicitly allows for the "determination"
implicit in pursuing a case before a panel.In
any event, what is decisive under Article 23.2(a) is not so much whether an act
constitutes a "determination"  in our view, a more or less formal
requirement that needs broad reading -- but whether it is consistent with DSU rules and
procedures, the fourth element discussed below.

On
that basis, we find that USTR determinations under Section 304  made subsequent to internal investigations, WTO
consultations and proceedings, if applicable; and, in the case of determinations of
inconsistency, automatically and as a conditio since
qua non leading to a decision on action under Section 301  meet the threshold of
firmness and immutability required for a "determination" under
Article 23.2(a).

The third element under Article 23.2(a) as
applied to the specific determination under examination is also satisfied.We recall that this determination would be one
finding that US rights under the WTO have been denied, i.e. a determination "to the effect that a violation has occurred, that
benefits have been nullified or impaired or that the attainment of any objective of the
covered agreements has been impeded", thus meeting the third element under
Article 23.2(a).

In conclusion, if the USTR were to exercise, in a specific dispute, the right reserved for
it in Section 304 to make a determination of inconsistency before exhaustion of DSU
procedures, the US conduct would meet all four elements required for a breach of Article
23.2(a).

658
Imagine, for example, legislation providing that all imports, including those from WTO
Members, would be subjected to a customs inspection and that the administration would
enjoy the right, at its discretion, to impose on all such goods tariffs in excess of those
allowed under the schedule of tariff concessions of the Member concerned.Would the fact that under such legislation the
national administration would not be mandated to impose tariffs in excess of the WTO
obligation, in and of itself exonerate the legislation in question? Would such a
conclusion not depend on a careful examination of the obligations contained in specific
WTO provisions, say, Article II of GATT and specific schedule of concessions?